Heineken has declined to comment on a report that it has agreed a distribution deal with United Breweries in India, but has confirmed the two brewers are in talks.

United Breweries, in which Heineken claims a 37.5% stake following its takeover with Carlsberg of Scottish & Newcastle last year, will bottle distribute Heineken brands in India, the country's Economic Times newspaper today (12 May).

UB Group will also get a payment of INR3bn (US$60.5m) from Heineken in order to settle a dispute over Heineken's assumption of the Scottish & Newcastle stake, the paper said.

A Heineken spokesperson confirmed to just-drinks that the two brewers are in talks, but said: "At this point in time there is nothing to report." He added that the Netherlands-based brewer does not comment on market speculation.

United Breweries, which forms part of Indian billionaire Vijay Mallya's UB Group empire, is the leading brewer in India with market share of just over 40%. Its main brand is Kingfisher.

SABMiller is India's second largest brewer, with a market share of around 38.5%.

Heineken already operates in India via its joint venture with Fraser & Neave, Asia Pacific Breweries.